Thursday, 11 July 2019

Public Service Pay Commission Report on the Permanent Defence Force: Statements

I thank the House for giving me the opportunity to discuss the report of the independent Public Service Pay Commission on recruitment and retention in the Permanent Defence Force. I welcome the report. It is an independent assessment following the work of the pay commission, as well as inputs from my Department, military management, the Department of Public Expenditure and Reform and the two official representative associations, the Permanent Defence Force Other Ranks Representative Association, PDFORRA, and the Representative Association of Commissioned Officers, RACO. The report was accepted in full at last week’s Cabinet meeting, at which an extensive implementation plan was also agreed to. The report represents a €10 million package which will result in immediate and future benefits for members of the Permanent Defence Force. It’s main conclusions are that the Defence Forces face a range of challenges in meeting their full strength and retaining certain skilled and experienced personnel. The report also contains a broad range of recommendations aimed at improving recruitment and retention in the Permanent Defence Force.

Among the proposals contained in the report is a 10% increase in the military service allowance which will boost the earnings of the majority of Defence Forces personnel by between €602 and €675 per annum. The overall estimated cost of this measure is €4.8 million per annum. Several allowances will be restored to pre-Haddington Road agreement levels, returning to members of the Defence Forces the 10% cut. They include the patrol duty allowance, the security duty allowance, the Army Ranger Wing allowance and the explosive ordnance allowance. The overseas peace support allowance and overseas armed peace support allowance will also be increased. This means that, for a typical six-month deployment, enlisted personnel will receive between €15,300 and €16,100 and officers, between €19,000 and €20,400. This represents tax-free increases of between €1,400 and €1,850. The premium rates of certain allowances for duties performed at weekends are being reinstated. The rate for 24-hour security duty performed on a Sunday will more than double from €47.59 to €105.79. This is paid in addition to basic pay and the military service allowance. The return of an incentive scheme to address pilot retention issues in the Air Corps is also recommended and welcomed. While the details of the scheme still have to be worked out from the previous scheme, when commenced, it will provide annual payments of €18,000 for the majority of pilots, with an additional lump sum payment at the end of the commitment period. It will see significant increases in yearly earnings for eligible Air Corps pilots. The total cost of all of these measures is €10 million per annum.

The recommendations of the Public Service Pay Commission will build on the increases in core pay for members of the Defence Forces in accordance with national pay agreements. In the past two years it has included the phased unwinding of the FEMPI legislation, the restoration of pay scales and improved pay scales for new entrants to the Defence Forces. The increase in the military service allowance and the restoration of the rates of certain other allowances are in addition to measures related to core pay in the current public service stability agreement. They will deliver pay benefits of between 6.2% and 7.4% over the lifetime of the agreement.

All Defence Force personnel earning less than €70,000 will have their pay scales fully restored by the end of the agreement in October 2020. Civil and military management will progress the review of technical pay for more than 2,500 specialists in the Defence Forces. I have asked my officials to prioritise the Naval Service in the review and, together with the military authorities, identity other areas for prioritisation.

Preliminary discussions have taken place with PDFORRA. The increases in the allowances as recommended by the commission, will be implemented on confirmation of acceptance of the measures by the representative associations.

Separate to the recommendations arising from the Public Service Pay Commission, there are a number of outstanding adjudication findings across the public service, which could not be implemented having regard to the provisions of the Financial Emergency Measures in the Public Interest, FEMPI, Acts, 2009 to 2015. I have had discussions on this matter with my colleague, the Minister for Finance and Public Expenditure and Reform, Deputy Donohoe. With his agreement, it is intended to prioritise the outstanding adjudications in respect of the Defence Forces and pay the awards on a non-retrospective basis from 1 July 2019. The effect of these measures is that the Army Ranger Wing allowance will increase by around €50 to €200 per week. Cooks with the relevant qualifications, will go from tech pay 2 to tech pay 3, which is an increase from €26.90 to €40.42 per week. Those account holders currently not in receipt of the account holder allowance will each receive the allowance of €65.80 per week. Recruits and apprentices will no longer be charged for rations and accommodation, saving each individual €43.63 per week. The annual value of these measures will be in the region of €1.5 million. PDFORRA has initiated legal action on these adjudications and, in this context, my officials will discuss these matters further with the association and I have asked its officials to enter into dialogue with my officials. This Government is committed to delivering incremental improvements to pay for our public servants, including military personnel. It behoves us to only do so to the extent that is affordable and sustainable. With such uncertainty in the international environment due to Brexit and other factors, it is necessary that we continue to manage public pay in a careful and responsible manner.

The commission identified significant retention issues in the Permanent Defence Force. The current challenges we face in filling certain posts arise due to specific circumstances. As with many other areas of the public service, challenges in the recruitment and retention of personnel have arisen in a buoyant economy, with many personnel or potential personnel, including pilots, air traffic control staff and Naval Service technicians, having scarce and highly marketable skills. In addition, many personnel who leave have accrued a pension entitlement and this can add to the attractiveness of external employment.

There are no quick fixes to the current challenges facing the Defence Forces. Returning them to full strength will take time. A high-level implementation plan; strengthening our Defence Forces, has been developed with inputs from the Departments of the Taoiseach, Defence, and Public Expenditure and Reform and military management. The plan sets out clearly how the recommendations in the report will be implemented. The implementation plan includes a commitment to initiate a review of current retention strategies. The implementation of the recommendations in the report will build upon the programme of HR development within the Defence Forces.

Before I conclude, I want to take this opportunity to set out exactly what the wide range of recommendations will mean for serving members of the Permanent Defence Force. If the report is accepted by the representative associations, pay scales for enlisted ranks, including military service allowances for line Army personnel following the implementation of a 10% increase in military service allowance will be as follows: a private, 3 star, post-2013 entrant, will earn between €28,110 and €39,023; a corporal, pre-2013 entrant, will earn between €38,233 and €39,940; a sergeant, pre-2013 entrant, will earn between €40,880 and €43,296; a company sergeant, pre-2013 entrant, will earn between €47,257 and €50,254; and a sergeant major, pre-2013 entrant, will earn between €51,829 and €55,253. The pay scales for commissioned ranks, including military service allowances, for line Army personnel will be as follows: a second lieutenant will earn between €36,087 and €39,721; a lieutenant will earn between €41,039 and €51,118; a captain, PRSI class C, will earn between €49,689 and €61,471; a captain, PRSI class A, will earn between €52,206 and €64,610; a commandant, PRSI class C, will earn between €61,825 and €74,805; a commandant, PRSI class A, will earn between €64,988 and €78,608; a lieutenant colonel, PRSI class C, will earn between €73,766 and €81,516; a Lieutenant Colonel, PRSI class A, will earn between €77,517 and €85,674; and a colonel, class C PRSI, will earn between €83,857 and €100,314.

These earnings relate to Army line ranks. In many cases, Air Corps and Naval Service personnel receive additional remuneration per equivalent rank arising from additional allowances for duties performed. Specialist officers such as doctors, engineers, and pilots receive higher rates of pay. On top of these increased rates of pay, members of the Defence Forces will continue to benefit from increases in core pay under the public service stability agreement. On 1 September, there will also be a pay increase of 1.75% for all annualised salaries, a 0.5% increase on 1 January 2020 on annualised salaries up to €32,000 and a further pay increase of 2% on all annualised salaries on 1 October 2020. In addition, the 5% FEMPI cut in allowances will also be restored by the end of the agreement.